Santa Claus arrived noticeably early this year.
The back-to-school crowd had barely cleared out the Vera Bradley backpacks, sock monkey sticky notes and shaggy pens when out came the stockings, hot-pink faux trees and inflatable reindeer.
Halloween and Thanksgiving hardly had a chance. This time of the year is known as Christmas creep, when the retail season that brings in more cash than any other continues its march toward midsummer.
Gone are the days when Christmas shopping started the day after Thanksgiving. The appearance of decorations in September now means the season lasts three months—one-fourth of the year—and soon might compete with the National Basketball Association and Major League Baseball for the most drawn-out season on the calendar.
Hobby Lobby on O’Neal Lane might have ushered in the Capital Region’s Christmas season, with shiny tree ornaments hanging just a few aisles over from the remnants of summer pool party merchandise.
Sears, Kmart and Home Depot came next, with holiday displays and merchandise appearing on shelves during the last week of September. Macy’s, Lowe’s, Stine’s, J.C. Penney, Hallmark, Kirkland’s and other area retailers have since decked their halls as well.
So what’s the rush?
Analysts say the strategy is about retailers battling two phenomena: a stalled economy and the growing popularity of e-commerce.
The National Retail Federation predicts that holiday sales will rise by 2.8% this year, compared to a 5.2% gain last year following four consecutive declines. Overall sales are expected to reach $465.6 billion.
“Just when you think the U.S. economy is turning around, another factor comes into play that changes the game,” NRF Chief Economist Jack Kleinhenz says. “Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season. How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel.”
Competition with online retailers also is increasing. In 2010, shoppers spent $32.6 billion online during the holiday season—a 12% increase over the previous year and an all-time record, according to comScore, which tracks high-tech trends. Last year, four in 10 people planned to shop for the holidays online.
Though discount stores like Target and Walmart remain the most popular choice for holiday shoppers, the annual holiday survey by New York market research firm NPD Group shows 38% of respondents plan to buy gifts online this year, making it the second-most popular method.
There’s much at stake. The National Retail Federation estimates that for some retailers, the holiday season can generate as much as 40% of annual sales. Black Friday—the day after Thanksgiving—refers to the point at which some retailers begin to turn a profit.
Retailers who put their holiday merchandise out early could be onto something. Displaying Christmas merchandise months ahead of time allows recession-weary customers who don’t want to increase their debt to spread out their purchases over time and pay cash, instead of loading it all up on the credit card in December.
Those people who see holiday items in the stores early might also be more likely to buy them there rather than waiting closer to the holiday to buy them online.
Marshal Cohen, chief industry analyst for NPD Group, says retailers are competing to be the first to establish themselves as the “headquarters for the holiday.”
Another possible reason for early holiday displays: NPD Group’s annual holiday survey indicates just 41% of consumers still wait until Thanksgiving weekend or later to start their hunt for gifts.
For the past nine years, National Retail Federation studies have shown a whopping 40% of shoppers start buying Christmas presents before Halloween.
It’s clear people are already thinking about the holidays. Google searches for “2011 Christmas gifts” in the last 30 days have risen 90%, and “Christmas toys 2011” and “Christmas trees” searches have risen 80% each. In Louisiana, Christmas-related Googling has been on the rise 180% since July.
“Christmas in September? Trust me, there’s plenty of demand for it,” says Kathy Grannis, spokeswoman for the National Retail Federation. “While [shoppers] are choosing which vampire or pumpkin costume they want, they are also reaching for ornaments and tree skirts.”
Barbara Jans, marketing manager for the Mall of Louisiana, says the trend is all about giving the customers what they want.
“Retailers are pretty savvy about customers,” she says. “There is definitely a group of shoppers who want to get a jump on shopping prior to the holiday. They’re not going to put out merchandise that wouldn’t be sold.”
The mall itself, however, won’t really kick off its Christmas until a tree-lighting ceremony on Nov. 18.
Home Depot spokeswoman Jen King says the strategy is “a benefit to our customers who like to view everything at once and plan out what they want to buy.”
Early or not, economist Loren Scott predicts a fairly upbeat holiday shopping season in the Capital Region. Recent Department of Labor employment statistics don’t paint a true picture of the economic situation because of changes in the way those numbers are reported.
A strong chemical industry, announcements of business expansions, new firms coming into the Capital Region and other indicators all point to a promising retail season.
“It ought to be better this year than last year because I think the employment situation is better this year,” he says. “All the signals we’re picking up point to a better Christmas this year than last. It could turn a bit sour if the national economy turns even worse than it is now. If anything happens to slow job growth, that might put concern in people’s minds so they don’t spend.”
Jans says mall tenants are optimistic, given the recent increase in sales.
“Based on what we saw at back-to-school,” she says, “if that continues, we’re going to have one excellent holiday.”
One of the hottest trends for Christmas is neither when shoppers are shopping nor what they’re buying. It’s the method by which they’re paying for holiday gifts.
Layaway got its start in the Great Depression as a way for customers to afford their purchases. The practice all but vanished during the 1980s, when the onslaught of credit cards enabled shoppers to bring home presents before paying for them.
But times are tough, and retailers in search of ways to encourage spending are bringing the pay-ahead program back. For a small fee, shoppers can reserve an item and pay in installments or at the end of a contract without incurring interest or affecting a credit score.
Chains such as Sears, Kmart, Marshalls, T.J.Maxx, Toys”R”Us and Burlington Coat Factory are offering layaway programs. And a new survey by ConsumerSearch.com found that 42% of respondents planned to use layaway this year for holiday gifts.
“Many shoppers remember layaway positively from the past and are pleased that companies are bringing it back for the holidays,” says Christine Frietchen, editor in chief of ConsumerSearch.com. “Perhaps more importantly, consumers recognize layaway as a potentially effective money-management tool. Layaway will likely make a big difference to a number of shoppers this holiday season.”
Economist Loren Scott says it makes sense that layaway would make a comeback, given that new regulations on credit cards have driven many banks to impose fees on debit card usage.
Says Scott: “One way to avoid all of that is to go to layaway.”
